I’m not a huge fan of Tony Robbins, but I did find his interview on The Tim Ferriss Show back in October very fascinating. One nugget of financial wisdom and psychology insight that I took away from the nearly 2-hour interview was a correlation between monkeys and humans.
Tony described an experiment where monkeys’ happiness was gauged when being given an apple. As you might imagine, a monkey would be extremely delighted to be given a piece of fruit. However, if you give a monkey two apples, and then take one away, the monkey gets angry. Yet as we all know, both experiments resulted in effectively giving a monkey a single apple.
Comparing the monkeys to humans, we’re very much the same. Let’s liken this to growing a savings or retirement account. If, in one fell swoop, we decided to change from saving 6% of our income for retirement to 12%, we’d surely notice the difference. But, on the other hand, if this change to 12% was performed slowly (even better at the same time of an annual raise or promotion), we wouldn’t notice any change or loss of income. Nothing is being ‘taken away’ from us.
As humans, or perhaps as all semi-intelligent creatures understand, losing something is significantly more difficult to stomach than receiving a lesser amount. Even more so if we aren’t aware of the amount we’re not receiving. As a result of this psychological predicament, investment companies have developed programs to slowly raise the percentage of an investor’s savings over time, say from 6% to 12% by means of a 1% increase each year. The investor doesn’t really notice, yet over their lifetime is capable of doubling or even tripling their final investment, at no noticeable cost.
If you have a retirement account, or even stash money away each month into a savings account, see if your financial institution or investment company can slowly raise your level of contribution over time. We may have good intentions of saving more money down the road, but we’re creatures of immediate satisfaction and a loss of any kind is very painful. Don’t be a monkey – SAVE!
If you want to learn even more about what monkeys can teach us about money, check out this article from Mental Floss.
Sam D. Miller 
Two full hours of Tony Robbins? You poor guy; you might have to enter a rehab program, lol! But seriously, case in point, my company has a program in which our 401-K deduction is increased by one percent each year (right after we receive our reviews and raises). I joined the program several years ago and slowly increased my deduction from 10% to 17%. I never even noticed it!
I agree with Surprise Millionaires! Two FULL HOURS? lol! You are correct that going with an automatic increase in your contributions is without a doubt the best way to go. We did that and it does add up fast. Great post!
Wow. Very insightful! We just bumped up our retirement savings a few months ago. It hurt, but we’ve decided to grin and bare it.